President Trump declared the U.S.-Iran understanding "over" and warned of fresh strikes, sending crude prices up about 5% and pulling most of Wall Street lower. The threat of renewed conflict in the Strait of Hormuz revived the war-risk premium that markets had recently shed.
President Trump told reporters at a NATO summit in Turkey that the interim understanding with Iran was finished, and he warned the US would strike again the same evening. According to Yahoo Finance, he dismissed further talks: "As far as I'm concerned, it's just a waste of time dealing with them." He added that the US would probably hit Iran "hard again" that night.
The remarks followed American military strikes on Iran, which came in response to attacks on commercial vessels in the Strait of Hormuz. With one of the world's busiest oil corridors back in question, traders moved quickly to price in the risk of disrupted supply.
Oil leads the reaction
Energy was where the escalation hit hardest. Crude prices climbed by about 5%, with West Texas Intermediate trading above $74 a barrel and Brent holding near $78. Brent's move worked out to a 5.2% surge to multi-week highs, driven by fears that shipping through the strait could seize up.
The pressure intensified after the Treasury revoked Iran's oil export license, a step that sharpened concerns about global supply. For traders watching how the crisis feeds through to oil markets, the export ban added a second, policy-driven leg to the rally.
Stocks and the wider fallout
Equities took the news unevenly. The Dow Jones Industrial Average fell roughly 1%, or more than 500 points, while the S&P 500 slipped 0.2% and the Nasdaq Composite trimmed losses to gain 0.2%. Beneath the indexes, nine of eleven S&P 500 sectors declined, with industrials leading the drop at 3.41%.
The escalation reached beyond markets. The International Monetary Fund again cut its 2026 global growth forecast to 3%, citing Middle East war risks. Fed traders, meanwhile, still project a likely December rate hike.
Sources: Yahoo! Finance Canada, marketscreener.com
Trading involves risk.
Risk Disclaimer
